Shoppers could be paying more than their neighbours for identical items, according to a growing body of evidence suggesting retailers are quietly adjusting online prices based on personal data. The practice, known as “surveillance pricing”, has prompted a formal investigation by the US Federal Trade Commission and is now drawing scrutiny from lawmakers and consumer advocates alike.
The idea that two shoppers might pay different prices for the same product, based purely on who they are rather than what they are buying, sits at the heart of a practice now known as surveillance pricing. Rather than adjusting prices in response to demand, retailers using this approach draw on personal data — including location, device type and browsing behaviour — to estimate how much an individual customer might be willing to pay, then set prices accordingly. The practice has become the subject of a formal probe by America’s Federal Trade Commission (FTC), and is increasingly being challenged by lawmakers and consumer campaigners.
How companies build a pricing profile
According to consumer data on the practice, the process typically begins the moment someone visits a product page online. Retailers can draw on a range of signals — including a shopper’s preferred browser, their postcode or zip code, and even how long they linger on a particular page — to build a profile that feeds into the price ultimately displayed. In effect, the more information a company holds about a customer, the greater its ability to tailor, and potentially inflate, the price that customer sees.
Not the same as surge pricing
Surveillance pricing is distinct from surge pricing, the more familiar practice of temporarily raising prices during periods of high demand or limited supply, such as during a major event or a shortage. The key distinction lies in transparency: while surge pricing is generally visible and tied to identifiable market conditions, surveillance pricing operates less visibly, with adjustments made on the basis of personal data that consumers cannot see or verify.
What the FTC investigation has found
The FTC opened its formal investigation into surveillance pricing in 2024, ordering eight companies that develop pricing technology to disclose how they use consumer data and artificial intelligence to personalise prices for shoppers. In preliminary findings published in January 2025, the regulator said retailers could draw on highly detailed personal information — including precise location, browsing history, shopping habits and even mouse movements — to influence not just the prices shown to consumers, but also the promotions they receive.
The FTC further found that some providers of pricing technology work with at least 250 retail clients spanning multiple sectors, including grocery stores and clothing retailers, pointing to concerns over just how widespread the practice may already be. The regulator also warned that the effects of surveillance pricing may extend beyond simple price changes, noting that companies could use consumer profiles to push more expensive products higher up search results, based on a shopper’s past behaviour or inferred personal characteristics.
States begin to legislate
The FTC’s findings have coincided with a wave of legislative activity at state level in the US, as lawmakers weigh up how to respond to the practice. In Michigan, legislators have passed bills that would bar businesses from using personal consumer data to charge different customers different prices for the same product, while still permitting price changes driven by legitimate factors such as supply and demand.
What happens next
The FTC’s investigation remains ongoing, and the regulator is continuing to invite public comments from both consumers and businesses as it examines the impact of surveillance pricing on privacy, competition and consumer protection more broadly.
